How it works
Enter the starting value, the ending value and the time between them, in years or months.
CAGR is the single steady yearly rate that would take the starting value to the ending value. It smooths out the ups and downs in between, so you can compare investments held for different lengths of time.
The result also shows the total return, the growth multiple, and about how long it would take to double at that rate.
The formula
CAGR = (ending value ÷ starting value) ^ (1 ÷ years) − 1
The total return is (ending value ÷ starting value − 1), shown as a percentage. The time to double at a growth rate g is ln 2 ÷ ln (1 + g).
A worked example
An investment of ₹1,00,000 that grows to ₹2,50,000 in 5 years has a CAGR of about 20.11% a year. The total return is 150%, and at that rate money doubles in about 3.9 years.
Frequently asked questions
What is a good CAGR?
It depends on the risk. A bank deposit might give 6 to 7%, while equity funds have varied widely from year to year. A past CAGR does not promise a future one.
Is CAGR the same as XIRR?
No. CAGR assumes one amount invested at the start and one value at the end. If you invested regularly, as in a SIP, XIRR is the better measure, because it accounts for when each amount went in.
Why can CAGR hide risk?
It shows only the start and the end. Two investments can have the same CAGR while one swung up and down a lot more along the way.